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Bucharest 2007. Trends in intermediation European & International Public Affairs agenda. Nic De Maesschalck, Director. B I P A R European Federation of Insurance Intermediaries. 47 national associations in 30 countries 80,000 insurance intermediaries 250,000 employees

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bucharest 2007
Bucharest 2007

Trends in intermediation

European & International Public Affairs agenda

Nic De Maesschalck,


b i p a r european federation of insurance intermediaries
B I P A REuropean Federation of Insurance Intermediaries
  • 47 national associations in 30 countries
  • 80,000 insurance intermediaries
  • 250,000 employees
  • Represents interests of intermediaries with European institutions

World Federation of Insurance Intermediaries

  • 5 Chapters : the 5 contintents
  • members: North+Latin America, Asia, Africa, Europe
  • 100 national associations / 80 jurisdictions
  • Promotes profession with international bodies such as: UN / World Bank/ IMF , OECD, IAIS, WTO, …
the web of interacting interests
Every article in a national regulation related to insurance

is the result of

an interaction of national, European and international interests and public affairs activities.

The web of interacting interests
the web of interacting interests1





Trade unions


European Parliament

European Commission




World Bank




National associations of insurance intermediaries





Geneva Association






Employees of intermediaries

Insurance intermediaries

The web of interacting interests
effective promotion of industry s interests requires recognition as the single voice
Effective promotion of industry’s interests requires recognition …as the single voice


  • World Bank/ IMF.


  • European Commission, European Parliament
  • CEIOPS, CESR (consultative panels)

National – UNSICAR

  • the standing of our national associations with the respective regulators, supervisors, public in general and other market parties.
1 competition inquiry purpose
1. Competition Inquiry - Purpose
  • To understand how Business insurance market works
  • To detect failures and frictions
  • Interim report published in January and final report expected by September 2007.
  • Many issues for insurers but I concentrate here only on some intermediary issues
main findings intermediaries
Main findings - intermediaries
  • Interim report recognises special role of intermediaries in meeting clients’ insurance needs
    • Reducing search costs
    • Reducing uncertainty
    • Asymmetric bargaining power
  • Interim report also recognise role of intermediaries in fostering competition in the business insurance market place
    • In particular as facilitating entry by new carriers

But :

main findings intermediaries brokers multiple agents
Main findings – intermediaries (brokers+ multiple agents)
  • Identifies potential conflicts of interest in sector : in particular :
    • when delegates authorities
    • contingent commission
  • Suggests that there is a lack of transparency
bipar interim answer at public hearing
BIPAR interim answer at Public Hearing:
  • Effects of potential conflicts are mitigated thanks to high level of competition in our sector
  • Conflicts managed by conflict management systems
  • IMD (information requirements) is very important and due to the timing the interim results do not take into consideration the impact of the IMD (survey before IMD implementation)
Came into force on 15 January 2005

Not fully yet implemented ( Germany)

The Fundamental Objectives:

To enable insurance intermediaries to operate freely throughout the EU

Enhancement of consumer protection

Insurance Mediation Directive (IMD)


What’s in the IMD ?

  • Activity-based: no more distinction between brokers/ agents .
  • Registration requirements
  • Professional requirements
  • Information requirements
--- main remaining issue : definition of FOS---

The Single license is (more or less) comparable with a driving licence: you can have a Rumanian driving licence but when driving in the UK you have to drive on the left lane and follow the UK speed limits !!!!


  • Single license based upon notification
  • But general good requirements and extra information requirements in host country remain applicable therefore necessary to definbe what FOS is.
imd next steps
IMDnext steps:
  • Revision is planned for 2008/2009
  • Between now and then :
    • Definition of intermediaries’ FOS: when to notify ?
    • CEIOP’s work (Luxembourg protocol, implementation of key provisions/ FOS/ proposal of amendments)
    • Commission’s evaluation of correct IMD implementation
    • BIPAR follows-up
A more general outlook

on current and future issues

issues on the international agenda in 2007 2008 from an intermediary perspective
Issues on the international agenda in 2007/2008 (from an intermediary perspective)
  • The new regulatory/ supervisory context

supervision will be focused in the future

around three main areas:

- Financial regulation/supervision (solvency)

- Corporate governance

- Market conduct

  • WTO + liberalisation
In coming years:

More attention to “Market Conduct issues”

  • Claims handling / Complaints handling
  • Contract certainty
  • Insurance education of the public
  • Training and competence
  • Proper handling of client money
  • How much information should be provided to policyholders and how much can the customer deal with
  • Anti-fraud / Anti-Money laundering
other points of attention are
Other points of attention are:
  • Catastrophic Risks / terrorism
  • Finite reinsurance
  • Reinsurance supervision (+ Captives)
  • Accounting Standards
  • Image / reputation of the industry
  • Insurer’s disclosure of performance
  • Fit and proper requirements
  • Supervision of financial conglomerates
  • Outsourcing in financial / insurance services
debate started
Debate started !

Is there over-regulation ?

  • At EU level : 2006-2010 workplan :
  • Consolidation/ implementation/ Evaluation rather than new regulation (regulation only when necessary)
  • Making Europe more efficient vis-à-vis world markets
a brief market perspective
A brief market perspective
  • 10 years ago many observers predicted the end of insurance intermediaries.
  • «  Direct writers, alternative distribution and internet would take over …»
  • Today we see that professional intermediaries are more than ever needed and succesful : They are the drivers of the competition and producers of solutions in an increasingly sophisticated environment.
bucharest 20071
Bucharest 2007

Trends in intermediation

European & International Public Affairs agenda

Nic De Maesschalck,


bucharest 20072
Bucharest 2007

Trends in intermediation

European & International Public Affairs agenda

Nic De Maesschalck,


outlook commercial lines business
Outlook: commercial lines business
  • New risks : sophisticated in nature+ size
  • Environmental liability, catastrophic risks, IT risks, professional liability,

+ increased international trade/ investments

  • Requires international capacity, or ART
  • Internationalisation+liberalisation
  • Added value of intermediaries will be increasingly necessary.
outlook personal lines
Outlook personal lines
  • Intermediaries still major marketshares
  • Some exceptional successtories of alternative distribution in few markets (car insurance, direct, telephone sales, car dealers)
  • Clients however increasingly aware that insurance is more than price. : added value of intermediaries
  • The more offer, the more need for advice in the choice. (even so-called standardized products are very different from one insurer compared to another).
  • Communication about role = necessary.
  • Importance of pensions/ financial services (privatisation)